I'm trying to understand how to treat LTCG on my rental house (sold this year). The adjusted basis is $106K (with selling expenses etc but not including depreciation) and the sales price was $102K. Loss before depreciation is $4K. Depreciation taken was $12K. Gain after depreciation is $8K. Depreciation ran from 1993 - 2001, straight line.

However, we also sold unimproved land this year with LTCG of $50K.

My question: How much of the depreciation will I be taxed on? Will I pay 25% tax on the full $12K or on the $8K remaining after the loss? Do I need any forms other than Schedule D?

You have only a $8,000 gain on your reental house. payable at the 25% depreciation recovery rate. Section 1250 property is reported on Form 4797, which feeds into Sch. D.

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